Zynga (NYSE: DXC) and DXC Technology (NYSE:DXC) are both consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, dividends, valuation, profitability, risk, earnings and institutional ownership.

Volatility & Risk

Zynga has a beta of 0.39, meaning that its stock price is 61% less volatile than the S&P 500. Comparatively, DXC Technology has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500.

Valuation & Earnings

This table compares Zynga and DXC Technology’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Zynga $861.39 million 4.01 $26.63 million $0.03 134.00
DXC Technology $24.56 billion 1.06 $1.75 billion $7.94 11.64

DXC Technology has higher revenue and earnings than Zynga. DXC Technology is trading at a lower price-to-earnings ratio than Zynga, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Zynga and DXC Technology, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zynga 2 2 7 0 2.45
DXC Technology 0 5 10 1 2.75

Zynga presently has a consensus target price of $4.76, suggesting a potential upside of 18.41%. DXC Technology has a consensus target price of $104.80, suggesting a potential upside of 13.35%. Given Zynga’s higher possible upside, research analysts clearly believe Zynga is more favorable than DXC Technology.

Dividends

DXC Technology pays an annual dividend of $0.76 per share and has a dividend yield of 0.8%. Zynga does not pay a dividend. DXC Technology pays out 9.6% of its earnings in the form of a dividend.

Insider and Institutional Ownership

74.6% of Zynga shares are held by institutional investors. Comparatively, 85.2% of DXC Technology shares are held by institutional investors. 11.9% of Zynga shares are held by company insiders. Comparatively, 0.7% of DXC Technology shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Zynga and DXC Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Zynga 4.04% 2.37% 1.98%
DXC Technology 7.74% 18.67% 7.39%

Summary

DXC Technology beats Zynga on 12 of the 17 factors compared between the two stocks.

Zynga Company Profile

Zynga Inc. develops, markets, and operates social games as live services in the United States and internationally. The company's games are played on mobile platforms, such as iOS and Android operating systems, as well as on social networking sites, including Facebook. It also provides advertising services comprising mobile and display ads, engagement ads and offers, and branded virtual goods and sponsorships to advertising agencies and brokers; and software licensing and maintenance services related to NaturalMotion technology, as well as licenses its own brands. The company was formerly known as Zynga Game Network Inc. and changed its name to Zynga Inc. in November 2010. Zynga Inc. was founded in 2007 and is headquartered in San Francisco, California.

DXC Technology Company Profile

DXC Technology Company, together with its subsidiaries, provides information technology services and solutions primarily in North America, Europe, Asia, and Australia. It operates through three segments: Global Business Services (GBS), Global Infrastructure Services (GIS), and United States Public Sector (USPS). The GBS segment offers technology solutions comprising enterprise, cloud application, and consulting services; application services; analytics services; business process services; and industry software and solutions. The GIS segment offers cloud and platform services; workplace, mobility, and Internet of Things services; and security solutions. The USPS segment delivers IT services and business solutions to all levels of government in the United States. This segment offers cloud, platform, and IT outsourcing services; enterprise and cloud application services; enterprise security solutions; mobile enterprise, virtual desktop and application, and workplace device services; and analytics services, such as analytics platforms, information governance, artificial intelligence, and advisory services. The company was formerly known as Computer Sciences Corporation and changed its name to DXC Technology Company in April 2017 as a result of its merger with the Enterprise Services business of Hewlett Packard Enterprise Company. DXC Technology Company was founded in 1959 and is headquartered in Tysons, Virginia.

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